updated 08:15 am EST, Fri February 5, 2010
Hachette echoes Macmillan in e-book price war
Hachette today followed Macmillan's pricing strategy and said it would raise prices on its e-books. The approach will use the agency model where the publisher, not the retailer, sets the prices. It will notably use the Apple price scheme and ask between $13 and $15 for new and bestselling titles as well as change prices over time, with some older and shorter titles costing as little as $6.
The move effectively forces Amazon to raise the prices on Hachette's books at the Kindle store beyond their existing $10. Although yet to return Macmillan's books to the service, Amazon has said it would reluctantly increase prices after that publisher's demands and would let customers decide whether the increases are worthwhile. The online bookseller is unlikely to have a choice as it would suffer a severe blow in risking the loss of more than one publisher.
Both calls for change come just after Apple has unveiled the iPad and suggest that publishers are using the new book-friendly device as an opportunity to escape what they have seen as a constrictive pricing model at Amazon. Although they will sometimes make less money since Apple isn't paying a wholesale-level price to publishers, the move gives Hachette and others control over how their books are priced and thus will let them charge more if it becomes necessary. The Kindle approach sells books at a loss to Amazon and gives publishers little room to ask for more since Amazon is unlikely to deepen its losses further to maintain the $10 price.